Hi, welcome to the Joe DeLisi Financial Advisor podcast. I'm Joe DeLisi. This is take two because producer Jamie messed up tape. Take one. That's OK. Topic today. Where are markets headed? And this is not a gotcha. This is not one of those things where I say, I don't know. I know where they're headed. Markets are headed up. I just don't know when. Markets have never gone to zero, but markets have doubled many times over. We're actually see this going through data today. using some relatively recent history. you know, we've seen this play before. I'm recording the podcast on April 9th, Wednesday, April 9th. And what we're seeing is very familiar. This pattern is very familiar. We went through this during COVID in 2020. And what I'm referring to is somebody comes out and says something. It could be the president. It could be a cabinet member. It could just be a journalist. It could be somebody not even associated with the administration. And based off of what they say, the markets either go up or down significantly. And then they could even change during the day. And, you know, I remember going through this in 2020, once we sort of got past the initial fear, the physical fear of what was going on, and we saw that this was more an economic situation. And we saw those those movements back and forth. I remember back then saying, look, we just got to sit tight. This is going to work its way out. I couldn't have known it was going to work its way out as fast as it did. But there's a lesson in that too. We don't know how quickly things are going to turn around or when they're going to turn around. So I want to take you back in time. I want to take you back in time to 2020 when, as I mentioned, things were moving quickly just like they are now based off of data, information. Sometimes it's accurate. Sometimes it's not. March 9th of 2020. By the way, all this information I'm getting from Yahoo Finance. I've got it all listed here. I can read it off because I don't want to mess any of it up. It comes from Yahoo Finance. 2020 data from the S &P 500, March 1, 2020 through April 30, 2020. So in Yahoo Finance, can go in there and I can look at actual individual days where the market, the S &P opened and when it closed and what was the triggering event of the day. So all of this information is coming from that one area. So March 9, 2020, almost five years ago exactly, the market, the S &P was down almost 8%. One day, 8%. Why? I think we all know why. It was an escalation in fears over COVID. It wasn't called that then. I think we were still calling it the coronavirus. And that coincided with a collapse in oil prices, which I had forgotten about because Saudi Arabia and Russia got into a price war on oil. And I just totally forgot about that until I read it the other day researching this. And that was following OPEC's failure to agree on production cuts. S &P dropped 225 points, almost 8%. By the way, it triggered a circuit breaker. halt in trading, the first of several a month. We had a lot of that happening in March of 2020. The very next day. So we're down 8%. The very next day, we're up about 5%. Why? Well, markets rebounded, investors reacted to what? Hopes of stimulus. So it wasn't that we had stimulus. It was, hey, we think there's going to be stimulus. Very similar to what's going on right now. Hey, we think countries are going to negotiate or they've said they're going to negotiate or whatever you might, know, whatever the news it is. S &P up 5%. The very two days after that, March 12th now down 10 % one day, one day. I remember taking screenshots of this back then on my phone so I wouldn't forget. This is the day that the WHO declared it COVID-19 and declared it a pandemic. President Trump announced travel ban from Europe. And you know, when he did that, again, I remember this like it was yesterday. That's when everyone was like, man, this is going to be a long term deal. Like, you know, this is not going to be a week or a month. This is going to be a big, big deal. And so the markets obviously dropped about 10 percent. That was March 12th. On March 13th, the very next day, the markets finished up nine point three percent. Why? Trump declared a national emergency. Federal funds funds were basically flooding into the markets. Lots of liquidity. S &P jumps because, OK, we've got some we've got some tools to combat this now. Now we're to go 10 days out into the future. Okay. March 23rd, 2020, I'll never forget the date. It's easy for me to remember because it's my mom's birthday, March 23rd. That was the bottom. If I ask clients or prospects now, prospective clients now, when did the recovery start in 2020? Nobody really gets that answer right. Nobody says, March 23rd. Because when you think back, we were still in the thick of it. I mean, a lot of people are still very afraid physically for themselves or their family's well-being. There was like no end in sight to this. We didn't know what to do. And so to think that in the thick of all of that, we actually bottomed at March 23rd and then the bull market started from there. Nobody's really remembering that was the case, but that is the case. March 23rd, the market, the S &P finished down 2.9. The very next day it was up almost 10%. Why? Well, we had $2 trillion. It was the CARES Act, if you remember that phrase from Congress. Regardless of how you feel about it, that's what happened. A lot of liquidity going into the market. And then there was like an unlimited bond buying program. Again, liquidity into the markets. Now, that was March, April 2020. Let's talk about it. So the very next month, April 6th, up 7%. And that was when your memory, it's like going down memory lane. That was when New York and even parts of Europe were talking about reopening. And we thought, oh, we can breathe a sigh of relief. We can get back to normal and markets reacted. April 7th, the market was down again. That was on some cases, some new data on cases increasing. April 9th, up 6%. This is when the Fed came out and added an additional 2.3 trillion into the markets, which, by the way, really helped to overshadow a bad job. Remember, the unemployment went through the roof. Nobody was working. And so the Fed come in with trillions of dollars of liquidity. April 14th, up another 3%. April 14th was the first day. This is 2020, where we were starting to talk about a solution. We were talking about clinical trials for vaccines. And so markets like that. Return to normal. People get back to work. Economies keep moving. What does it tell us? What it tells us is that whether it's 2020, when things were whipsawing back and forth based off of sentiment and emotion, honestly, most of it, and the same things going on today, what it tells us is that look, the underlying businesses that make up the stock market, generally speaking, are sound. I can't speak for every stock in the S &P 500, but generally speaking, they are desirable companies to own. Because as soon as a little bit of good news comes out, hey, we have 50 countries willing to negotiate something like that. Markets ratchet up. Then a cabinet official will come out and say, hey, not so fast. Markets go back down. It's mostly emotional. It's not really based off of balance sheets and cash flow and PE and any of that kind of stuff. It's all emotional right now. And so we just got to be able to kind of stick to it. And I have to tell you this, too. The reason why I'm making this podcast now and we're releasing more, we're not just doing every two weeks like we normally do. is because I know that it is emotional and it should be. I'm not making light of it. You know, this is your money and the purpose of your money, as we've said, is to fully fund your financial plan, which holds all of your hopes and dreams for yourself and your family and your legacy. I mean, it's a big deal. I get it. And I want you to know that we may not be near the end here. Now, I'm recording this Wednesday, April 9th. By the time it gets through approval and out and distributed to you, I don't know what the markets are going to look like. I don't know what the sentiment's going to be. But I think we've got a little ways to go. Why do I say that? Well, it's the current administration's agenda. And I'm not making a comment on whether or not I agree with it or disagree with it. That's actually irrelevant. It does not matter how I feel about it. Honestly, it doesn't matter how you feel about it. They're going to do it. What the administration has come out and said, and I'll give you some sources and some quotes directly from them on this, is that they're operating off of a three-legged stool. So we're going to have and you've seen some of this in the news, but honestly, I don't think you've seen as much of it as you have just the tariffs. Everyone's talking specifically about tariffs right now. The tariffs are the first leg of the stool. The second leg of the stool are tax cuts. Administration wants to do significant tax cuts. They have talked about making permanent the current tax cuts that were done in 2017. And then they're looking for deregulation. They're looking to have lending easier for small businesses. So it's a three-legged stool. It's a three-pronged approach. And we've done those before. in this country, but we've never done them all at the same time. So it's going to be volatile. That's what they've said directly to us. Again, I'm not commenting on good or bad. I'm just simply saying it is. This is what's coming. So where am I getting this information? Well, I'm getting it right from the horse's mouth, so to speak. On April 2nd, President Trump in a Rose Garden speech, this is from Yahoo Finance as well, announced those new tariffs. That was that 10 % baseline, if you remember. And then he held up the chart because there were much higher tariffs on specific countries. And he linked that policy to our economic sovereignty and to job creation. He referenced upcoming tax cuts and deregulation. And this is a quote. He said, quote, We're going to bring back manufacturing with tariffs. We're going to cut taxes for our workers and we're going to get rid of red tape killing our businesses. That's that three pronged stool I was just talking to you about. So PBS News and the New York Times both covered that event. It wasn't an interview, but it was a public address and it reinforces that three prong approach I just mentioned to you. So right now we're dealing with tariffs. But understand that it's not going to end with tariffs. He's looking to cut taxes significantly and then furthermore deregulate the banking industry and lending, etc. So all three of these things are coming. How's it going to work? I have no idea. Nobody knows. All the commentators out there who are speaking and pontificating, they don't know. It's a big wait and see approach. Will it end capitalism? I doubt it. I mean, the world will end one day. I don't think it's going to be now. I don't think it's going to be in 2025. J.D. Vance, Fox News, April 3rd. Vice President Vance said in an interview, this one's an actual interview, he defended the tariff strategy. He said, look, it works hand in hand, quote, hand in hand with our deregulatory efforts and tax cut plans to eventually lower prices. And he went on and he was acknowledging, look, we're going to have some short term challenges. I think the president has said that as well. Do we want that? Well, no, it would be much easier if stocks just went up all the time. There was never any bad news. We never had any war or rumors of war. We didn't have any pandemics and we didn't have any recessions and we didn't have any. Look, that would be great. That'd be wonderful. But that's not how markets work. Markets are volatile. It could be because of something like this. It could be because something out of nowhere like like covid. It could be because of, you know, an aggressive nation, you know, invading another nation. It could be a litany of things. We never control when they're gonna happen, but they will happen. The funny thing about it is when we talk about the recovery that will eventually happen, the timing of it doesn't even really matter. Now, here's what I mean by that. If you're my client and you are in accumulation, you're in your 30s, you're in your 40s, this situation going on this year in the markets and the volatility, this is a blessing to you. You can buy low. Everything's on sale. Now, you've heard it before. The problem is I think you're hearing it without any kind of context, with no data like I'm supplying to you. I don't just say things to say them. actually look at the information and say, well, is this true? know, can this actually occur? And the reality is we know we're going to recover. If you're in accumulation, does it matter if the stocks come back? By the way, back in March of 2020, the data I gave you on the S &P, I think it bottomed out at like 2500 or 2200. The S &P is almost 5000. It was almost 6000. So growth happens fast. It does not matter when you're in accumulation, when that occurs. if you're closer to retirement, if you're one of my clients or within say three to five years of retirement, it matters a little bit more, but maybe not because if we've done the work together, we're not in 100 % equities, right? We diversify not just globally, but we also diversified between equities and high quality short term fixed income. And so this year, before all the tariff stuff hit, and even through it, international stocks were our diversification buddy. You know, they were performing very well. And even in this, they're performing quite well relative to US markets. And then furthermore, we've got that high quality short term fixed income. That's your cushion. So you're not in a 95 % equity portfolio, you might be 6040, it might be 5050. You know, so you are positioned well for retirement. And what about if you're in retirement? If you're my client, and you're in retirement, it's highly likely that you have a lot of cash on hand. We call it true liquidity, it probably You know, you know that phrase. What is it? It's just cash. It's not even the short term fixed income. It's actually cash sitting on the sidelines so that you can pull from that. In years, we've got significant downturns like this. I didn't know this was coming. I'm not timing anything. I just know it can happen. And so in retirement, we've got those cash cushions for you. So we're going to be OK. As long as we keep our heads and we're not emotional. I'm not going to be the weak link for you. I'm not going to sell out of the markets. I'm not going to start market timing and gambling with your money. I'm not going to let you do it either. Final thing before we close for today, I have a favor. In events like this, this happened in 2020, and it's happening this year too. it's good, and it's also not good. I'm getting emails from clients saying, you work with my family member? Will you work with my friend? I love that. What I don't love is that those people are coming to me usually really afraid. Some cases they don't have any advisor. Sometimes they just have an advisor to sleep at the wheel and they're just, you know, spitting out kind of talking points, but they don't have anything to back it up and people are afraid. I get the emotions, but I'm afraid that the, I'm worried that the emotions are going to trigger poor behavior. And when you make a mistake in a time like this in your portfolio, because either you did it or your advisor did it for you or with you, it can ruin your hopes and dreams because the purpose of your money. isn't to beat the stock market, it's to fully fund your financial plan. That's what we're looking for here. That's what I'm tasked to do. So my favor is this, if you know somebody that is worried right now, they don't have to work with me. If they just want to talk with me, I'm more than happy to do that. I love what I do. I love this stuff. I like looking at this. I like researching. like the purpose of going in there and making sure that your plans are working the way that we wanted them to work. So forward this podcast on or just give them my cell phone number or my email and we will take care of them. If you have any questions, as always, shoot us an email. If you want us to talk about something in particular, send us an email on that too. if you're my clients, you've got my cell phone and we will take care of you. That is it for today. We'll be back in either a week or two weeks depending on breaking news and whether or not we feel like we need to deal with it.